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CBM to finance construction of grid power line for Nezhda field

30.06.2020

Credit Bank of Moscow ("CBM") and the Far East and Arctic Development Fund (the "FEDF") will finance the construction of a grid power line for Nezhda field, Polymetal’s development project, to be carried out by UVES LLC ("UVES"), an independent grid management company.

The project CAPEX to be incurred by UVES is estimated at RUB 6 bln (c. US$ 87 mln, excluding VAT), of which RUB 5.5 bln will be funded with the FEDF’s 10-year senior loan and RUB 1.7 bln with CBM's 5-year subordinated loan facility. Polymetal will grant a guarantee for the FEDF loan, as well as guarantee payments under the lease agreement to UVES.

The power line will be built, owned and operated by UVES. Upon the construction completion scheduled for 2Q2022, the facility will be leased out to Polymetal on pre-agreed terms.

"Grid power enhances the economics of Nezhda and drastically reduces its environmental footprint”, said Vitaly Nesis, Group CEO of Polymetal. "Long-term project funding from FEDF supported by a highly experienced management team ensures successful execution of the project and allows us to preserve our focus on the key business".

"As one of the largest systemically important banks in Russia, we fully understand our economic, social and environmental impacts, and embrace responsibility that it implies. We are actively integrating sustainable development principles into our strategy, giving priority to financial projects that generate social and environmental benefits for the state and the society, like in the case of the construction of a power line for Nezhda, funded by us and the FEDF," noted Alexander Kaznacheev, Deputy CEO of CBM.

The single-circuit 110 kV power line will run 254 km from Khandyga, 415 km east from Yakutsk, to the Nezhda production site. The project is fully permitted with construction set to start in July.